Correlation Between Wrap Technologies and Kraken Robotics

Can any of the company-specific risk be diversified away by investing in both Wrap Technologies and Kraken Robotics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wrap Technologies and Kraken Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wrap Technologies and Kraken Robotics, you can compare the effects of market volatilities on Wrap Technologies and Kraken Robotics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wrap Technologies with a short position of Kraken Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrap Technologies and Kraken Robotics.

Diversification Opportunities for Wrap Technologies and Kraken Robotics

0.15

Correlation Coefficient

Wrap Technologies  Kraken Robotics

Average diversification

The 3 months correlation between Wrap and Kraken is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wrap Technologies and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Wrap Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wrap Technologies are associated (or correlated) with Kraken Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraken Robotics has no effect on the direction of Wrap Technologies i.e., Wrap Technologies and Kraken Robotics go up and down completely randomly.

Pair Corralation between Wrap Technologies and Kraken Robotics

Given the investment horizon of 90 days Wrap Technologies is expected to generate 4.87 times less return on investment than Kraken Robotics. In addition to that, Wrap Technologies is 1.12 times more volatile than Kraken Robotics. It trades about 0.03 of its total potential returns per unit of risk. Kraken Robotics is currently generating about 0.17 per unit of volatility. If you would invest  166.00  in Kraken Robotics on October 1, 2024 and sell it today you would earn a total of  20.00  from holding Kraken Robotics or generate 12.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Wrap Technologies  vs.  Kraken Robotics

Wrap Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wrap Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Wrap Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Kraken Robotics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Kraken Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wrap Technologies and Kraken Robotics

The main advantage of trading using opposite Wrap Technologies and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrap Technologies position performs unexpectedly, Kraken Robotics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kraken Robotics will offset losses from the drop in Kraken Robotics' long position.

The idea behind Wrap Technologies and Kraken Robotics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.